Aberdeen Emerging Markets Smaller Companies Investment Trust
In June Aberdeen is to launch the only UK-listed emerging markets (EM) smaller companies investment trust - to be known as the Aberdeen Emerging Markets Smaller Companies Trust PLC.
A sister to the highly successful Aberdeen Asian Smaller Companies Investment Trust PLC, the new trust has a simple capital structure and offers an opportunity to investors looking to gain exposure to an under researched, but fast growing, part of emerging markets.
The investment trust will target up to £150 million in gross proceeds and will be managed by Aberdeen's highly regarded 35-strong emerging markets equity team including Devan Kaloo and Mark Gordon-James. It will aim to provide long-term capital growth by investing in a diversified portfolio of listed emerging market smaller companies.
Aberdeen believes rising domestic consumption is a key attraction of emerging markets and high quality smaller companies is a direct and preferable way to gain exposure to this trend. With its wide range of domestic growth focused companies, the smaller companies sector offers greater exposure to this developing consumer story than the large cap universe.
The investment universe is huge and under researched with almost 2,000 companies in the MSCI EM Smaller Companies Index and many more outside that. This lack of attention can lead to opportunities for investment managers with a bottom-up, research based investment approach. Aberdeen has managed specific emerging market smaller companies' portfolios since the 1990s and in 2007 launched the Luxembourg domiciled, US dollar denominated Aberdeen Global - Emerging Markets Smaller Companies Fund.
Devan Kaloo, head of global emerging markets at Aberdeen, comments: "The emerging market small cap sector offers many high quality companies with robust growth prospects within it. As an added benefit, many of these companies are domestic-orientated, allowing investment managers to receive a high degree of exposure to rising emerging market domestic demand. Meanwhile the current shortage of third-party coverage of emerging market smaller companies enables managers who do their own research, to extract considerable long-term value."
Mark Gordon-James, a senior investment manager on the global emerging markets team, continues: "Through Aberdeen's rigorous, bottom-up investment process, we aim to identify those companies that meet our strict quality criteria, those that are attractively valued and offer the prospect for long-term share price growth. This investment trust will be diversifying and complementary to investors' existing exposure to traditional EM funds and its closed end structure is well suited to managing a smaller companies portfolio."
The trust will be listed on the London Stock Exchange's main market for listed securities. The launch will consist of a placing with institutions and a public offer for private investors. The public offer and prospectus is expected to be available from early June 2011. UK private investors interested in pre-registering for a prospectus should e-mail aam[at]lit-request.com.
The fund is expected to be managed so as to be eligible for ISAs, SIPPs and SSASs. The minimum investment via an Aberdeen Investment Trusts ISA is £1,000. J.P. Morgan Cazenove is acting as sponsor, sole global coordinator and sole bookrunner in connection with the launch.